Anyone who has ever embarked on the path of managing their personal finances will know that having good credit is something to strive for. However, in days gone by, most people have been able to get by with having moderate to substantial balances on credit cards and have not been in too much trouble if their credit score wasn’t near the top of the range.
That being said, times are quickly changing. In the current financial status of the day, having good credit is arguably more important than ever before. Most lenders are tightening their belts and looking for more ways to avert the risk potential. Even short-term lenders, who previously have been known to cater to borrowers with less than stellar credit, are tightening up and looking to lend to those with good credit.
Ultimately, the purpose of requiring better credit scores has to do with keeping the amount of risk involved in lending low. Many things have come together to create such a turn in the financial climate regarding credit scores.
Loan Repayment Issues
The events of the last year have resulted in a lot of redundancies and the inability for many people to return to work under normal circumstances. Without a steady influx of money, people who had previously taken out loans to help give their financial situation a boost are now unable to make payments on those loans. This is the case even for those who have taken out a short term loan.
The outlook is not all bad, though. Even though lenders now require borrowers to have better credit, a short-term loan is still going to offer your best chances of qualifying. If you have worked hard to build your credit and require a short-term loan to get by before your next pay check, you should still be able to find a lender who can provide what you need.
The Housing Market
It is no secret that the present status of mortgages in the UK isn’t exactly the friendliest it’s ever been to buyers. Lenders are less likely to offer mortgages to the amount that would make a down payment on a home reasonable, and the only way to get your hands on a mortgage that is in any way workable is to have absolutely stellar credit.
The fact of the matter is that if you hope to purchase a home for yourself in the coming years, your only option is to work to build your credit score to the best of your ability. Moreover, you will need to save up a sizeable deposit for your future home to qualify for the mortgage that you need. There is sound advice to be found from sources like the Home Owners Alliance on how you can save up the deposit that you need, but if you hope to do so while also building up your credit, you will need to be strict with your spending and saving.